Since most of us wouldn’t turn away free mon­ey, why do you think peo­ple don’t par­tic­i­pate?

Believe they don’t par­tic­i­pate because they need the mon­ey today to pay bills, and can’t afford to put it away even with the ben­e­fits of deferred tax­es & match­ing is a cop out. Sure, some peo­ple need the mon­ey today.

I bet the real prob­lem is deep­er and that “need­ing the mon­ey” is an excuse. In fact, they don’t know much about invest­ing, it’s demo­ti­vat­ing to watch what put away lose val­ue, and the bro­ker­ages don’t help by help­ing peo­ple under­stand how much they’ve accu­mu­lat­ed “for free” (as a result of match­ing, or tax defer­rals).

Until finan­cial prod­ucts address this moti­va­tion issue, this bar­ri­er to adop­tion, things won’t change. Tricks like mak­ing 401(k) par­tic­i­pa­tion the default will help, but only at the mar­gins.

The lack of trust with the bro­ker­ages and lack of knowl­edge about invest­ing & finance is the real bar­ri­er.

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About David

David Bressler is a tech executive who began offering financial coaching after noticing how little people know about investing. Since then he has made it his mission to help as many people as he can learn how to build sustainable wealth and gain financial flexibility.

Bressler, who earned his MBA at New York University’s Stern School of Business, writes and speaks about how adopting a few simple habits can dramatically improve your financial future. He lives in New York City with his wife and two children. The Elephant in the Room has a Paycheck is his first book.